Free Business Sale Agreement Template

BUSINESS SALE AGREEMENT

Sale Of Going Concern  ·  Asset Purchase  ·  England And Wales

This Business Sale Agreement (the "Agreement") is made on 2026-04-01 between Jonathan Hargreaves of 14 Mill Lane, Sheffield, S1 2BJ (the "Seller") and Apex Ventures Ltd of 200 Deansgate, Manchester, M3 4LH (the "Buyer"). The Seller wishes to sell, and the Buyer wishes to purchase, the Business (as defined below) as a going concern on the terms set out in this Agreement.

In this Agreement, unless the context otherwise requires:

"Assets" means all assets of the Business sold to the Buyer pursuant to this Agreement, as described in clause 2.
"Business" means the business known as Hargreaves Precision Engineering (Manufacture and supply of precision-engineered components for the automotive and aerospace sectors) carried on by the Seller at Unit 7, Attercliffe Industrial Estate, Sheffield, S9 3WG.
"Business Day" means a day other than a Saturday, Sunday or public holiday in England and Wales.
"Completion" means completion of the sale and purchase of the Business in accordance with clause 7.
"Completion Date" means 2026-04-30 or such other date as the parties may agree in writing.
"Disclosure Letter" means any letter of the same date as this Agreement from the Seller to the Buyer qualifying the Warranties.
"Goodwill" means the goodwill of the Business together with the exclusive right of the Buyer to represent itself as carrying on the Business in succession to the Seller.
"TUPE" means the Transfer of Undertakings (Protection of Employment) Regulations 2006 (as amended).
"Warranties" means the representations and warranties given by the Seller in clause 8.

Subject to the terms of this Agreement, the Seller shall sell with full title guarantee (as defined in the Law of Property (Miscellaneous Provisions) Act 1994), and the Buyer shall purchase, the Business as a going concern on the Completion Date.

The sale includes all Assets of the Business, including without limitation: Goodwill; all plant, machinery, tools and equipment; all stock-in-trade and work-in-progress; the benefit (subject to the burden) of all trading contracts, customer orders and supplier arrangements; all intellectual property rights used in the Business (including trade marks, domain names, software, know-how and confidential information); all books of account, records and data (subject to clause 10 on data protection); and the benefit of all licences, permits and consents held for the purpose of the Business, so far as they are assignable.

Liabilities: Except as expressly assumed by the Buyer under this Agreement, the Seller shall retain and remain solely liable for all debts, liabilities and obligations of the Business (of whatever nature, whether actual, contingent, known or unknown) accrued, incurred or arising on or before the Completion Date.

Risk and title: Risk in the Assets shall pass to the Buyer on Completion. Legal and beneficial title to the Assets shall vest in the Buyer on Completion against payment of the Purchase Price (or the balance thereof).

The purchase price payable by the Buyer to the Seller for the Business is £750,000.00 (the "Purchase Price"), exclusive of VAT (if any).

A deposit of £75,000.00 shall be paid to the Seller's solicitors as stakeholders on exchange of this Agreement, with the balance of £675,000.00 payable in immediately available cleared funds on the Completion Date.

Price allocation: The parties agree the following apportionment of the Purchase Price (for tax, capital allowances and SDLT purposes, and as a true reflection of the parties' commercial intent): Goodwill £500,000; plant and equipment £150,000; stock £75,000; IP £25,000.

VAT — Transfer of a Going Concern (TOGC): The parties intend that the sale of the Business should be treated as neither a supply of goods nor a supply of services for VAT purposes, being the transfer of a going concern within the meaning of section 49 of the Value Added Tax Act 1994 and article 5 of the Value Added Tax (Special Provisions) Order 1995. The Buyer warrants that: (i) it is, or will be immediately before Completion, a taxable person duly registered for VAT; (ii) it intends to use the Assets in carrying on the same kind of business as the Seller; and (iii) it has made any necessary option to tax under paragraph 2 Schedule 10 VATA 1994 in respect of any land transferred and has notified HMRC accordingly.

The stock of the Business shall be subject to a physical stock count and valuation at cost (or net realisable value if lower) jointly carried out by the parties (or their nominated stocktakers) on the Completion Date. The agreed stock value shall be paid by the Buyer as an adjustment to the Purchase Price within five (5) Business Days of agreement. Any dispute shall be referred to an independent expert (acting as expert and not arbitrator) appointed by agreement or, failing agreement, by the President of the Institute of Chartered Accountants in England and Wales on the application of either party.

The sale of the Business constitutes a "relevant transfer" within the meaning of regulation 3 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE"). On the Completion Date, the contracts of employment of all persons employed in the Business immediately before Completion shall, by operation of regulation 4 TUPE, transfer from the Seller to the Buyer on their existing terms and conditions (save for occupational pension rights within the meaning of regulation 10).

Information and consultation (reg 13): The Seller and Buyer each warrant that they have complied, and will continue to comply, with their obligations to inform and (where legally required) consult with appropriate representatives of any affected employees. The 1 July 2024 amendments permit direct consultation where the Seller has fewer than 50 employees or fewer than 10 employees transfer and no recognised representatives exist.

Employee Liability Information (reg 11): The Seller has provided the Buyer with the employee liability information required by regulation 11 TUPE not less than 28 days before the Completion Date, including identities, ages, statements of particulars (per s.1 Employment Rights Act 1996), disciplinary and grievance records over the prior 2 years, details of claims, and any collective agreements that will continue to have effect.

Mutual indemnities: The Seller indemnifies the Buyer against any liability (including claims under regs 4-7 TUPE, unfair dismissal, unlawful deduction of wages, redundancy pay and discrimination) arising out of any act, omission or event on or before the Completion Date. The Buyer indemnifies the Seller against any such liability arising after the Completion Date.

The Seller confirms there are 14 employees assigned to the Business as at the date of this Agreement.

Completion shall take place on the Completion Date at such location (or remotely, by exchange of executed counterparts in electronic form) as the parties may agree. On Completion:

The Seller shall: (a) deliver to the Buyer all documents of title and evidence of ownership relating to the Assets; (b) procure the execution of all assignments, novations, conveyances (including any TR1 if land is transferred) and other documents reasonably required to vest the Assets in the Buyer; (c) deliver possession of the Business premises and all keys, access codes, passwords and credentials; (d) deliver the books, records, customer and supplier data and all other items reasonably necessary for the conduct of the Business going forward; and (e) execute the Disclosure Letter (if any).

The Buyer shall: (a) pay the Purchase Price (or the balance thereof) in immediately available cleared funds; and (b) deliver the duly executed counterparts of all completion documents.

IP transfer: The Seller shall execute all necessary assignments to vest all intellectual property rights used in the Business in the Buyer, including trade mark assignments in Form TM16, domain name transfer instructions, copyright assignments under s.90 CDPA 1988 and, where relevant, patent assignments under s.30 Patents Act 1977. The Seller shall do all such further acts and execute all such further documents as the Buyer may reasonably require to perfect the Buyer's title to the IP.

Contracts: The Seller shall use all reasonable endeavours to obtain, on or before Completion, the consent of all counterparties to any customer and supplier contracts requiring such consent for novation or assignment. Pending such consent, the Seller shall hold the benefit of any non-transferring contract on trust for the Buyer and shall account to the Buyer for all sums received, and the Buyer shall (on a back-to-back basis) discharge the corresponding obligations as sub-contractor to the Seller.

Property: In relation to the Business premises, the Seller shall procure the assignment of the existing lease of the business premises to the Buyer, subject to any required landlord consent under section 1 of the Landlord and Tenant Act 1988 (which consent shall not be unreasonably withheld).

The Seller warrants and represents to the Buyer in the terms set out in this clause, subject only to matters fairly disclosed in the Disclosure Letter (if any). The Warranties are given as at the date of this Agreement and are deemed repeated immediately before Completion by reference to the facts and circumstances then existing.

Core warranties (always given, regardless of scope selected): (a) the Seller has full power and authority to enter into and perform this Agreement; (b) this Agreement constitutes legal, valid and binding obligations enforceable in accordance with its terms; (c) the Seller has good title to the Assets, which are free from all encumbrances; (d) the information disclosed by the Seller is true, accurate and not misleading in any material respect; (e) the books, records and management accounts of the Business have been properly kept and fairly present the financial position of the Business.

Full warranty suite: Standard warranties (f)–(j) above, plus: (k) the Seller owns or is duly licensed to use all intellectual property material to the Business and no third-party rights are infringed; (l) no contract is terminable or subject to renegotiation by reason of the sale (change-of-control); (m) no material undisclosed liabilities exist (whether actual, contingent or otherwise); (n) the Business is conducted in compliance with applicable environmental laws and no contamination or notice of breach subsists; (o) all licences, permits and consents necessary for the conduct of the Business are in full force and effect and the sale will not cause any of them to be revoked; (p) no offence under the Bribery Act 2010 has been committed by the Seller or any associated person; (q) the Business IT systems are owned or validly licensed, function in all material respects and have not been subject to any material security breach or ransomware incident in the previous 24 months; (r) all employees are correctly classified and there are no outstanding claims under IR35 (Chapter 10, Part 2 ITEPA 2003); (s) the Business holds adequate insurance which is in force at the date of this Agreement.

Claim period: Any claim for breach of the Warranties must be notified to the Seller in writing within 18 months from the Completion Date for general warranties and within seven (7) years for tax warranties (so as to dovetail with the HMRC discovery assessment window under s.34A Taxes Management Act 1970).

Cap and de minimis: The aggregate liability of the Seller for breach of the Warranties shall not exceed 50% of the Purchase Price. Individual claims below £500.00 shall be disregarded, and the Seller shall have no liability until aggregate notified claims exceed £5,000.00 (the basket floor), at which point the whole amount (and not only the excess) shall be recoverable from the first pound.

For the avoidance of doubt, nothing in this clause limits liability for fraud, fraudulent misrepresentation or fraudulent concealment, nor any statutory liability which cannot lawfully be excluded or limited (including, where applicable, section 2(1) Misrepresentation Act 1967).

The Seller covenants with the Buyer to pay to the Buyer, on a pound-for-pound basis, an amount equal to any liability to taxation (including income tax, corporation tax, VAT, PAYE, Class 1 national insurance contributions, SDLT, plastic packaging tax and any interest, penalties or surcharges) arising in respect of the Business prior to, or in respect of an event occurring on or before, the Completion Date and not specifically provided for in the management accounts.

This indemnity shall survive Completion and is not subject to the monetary cap or de minimis thresholds applicable to the Warranties. The Buyer shall promptly notify the Seller of any tax claim and shall permit the Seller, at the Seller's cost, to have conduct of the defence thereof, provided that the Buyer shall not be obliged to take any action that, in its reasonable opinion, would materially prejudice the Buyer or the Business going forward.

The Warranties are qualified by matters fairly disclosed in the Disclosure Letter. A matter shall only qualify the Warranties if it is disclosed with sufficient detail to enable the Buyer (acting reasonably) to identify the nature and scope of the matter disclosed. General disclosure of documents placed in the data room is not sufficient unless the relevance of the document to a specific Warranty is clearly indicated in the Disclosure Letter.

On Completion the Buyer shall withhold and pay into a joint solicitors' retention account an amount equal to 10% of the Purchase Price (the "Retention"). The Retention shall be held for twelve (12) months from the Completion Date (the "Retention Period") as security for any Warranty claims or tax indemnity claims by the Buyer.

On expiry of the Retention Period, the balance of the Retention (less any amount retained in respect of a notified but unsettled claim) shall be released to the Seller. Interest earned shall follow the principal sum. The retention account shall require the joint written instructions of the parties (or their solicitors) for any release.

Within thirty (30) Business Days of Completion the Buyer shall prepare and deliver to the Seller draft completion accounts as at the Completion Date showing the working capital of the Business (defined as current assets less current liabilities, excluding any debt-like items and cash). The Purchase Price shall be adjusted pound-for-pound by reference to any difference between actual working capital and a target of an amount to be agreed in good faith (typically the trailing 12-month average), with any shortfall payable by the Seller and any excess payable by the Buyer.

Dispute resolution: If the parties cannot agree the completion accounts within thirty (30) Business Days of delivery, the matter shall be referred to an independent firm of chartered accountants (acting as expert and not arbitrator) appointed by agreement or, failing agreement, by the President of the Institute of Chartered Accountants in England and Wales. The expert's decision shall be final and binding.

Between the date of this Agreement and Completion, the Seller warrants that the Business shall continue to be conducted in the ordinary and proper course. If, prior to Completion, there occurs any event or matter which has a material and demonstrably adverse effect on the Business or the Assets and which is not attributable to (i) general economic conditions, (ii) industry-wide changes, (iii) any change in law or accounting standards, or (iv) the announcement of this Agreement (a "MAC"), the Buyer may by written notice to the Seller terminate this Agreement, in which case any deposit shall be returned to the Buyer within five (5) Business Days.

The Seller covenants with the Buyer that (in order to protect the Goodwill of the Business transferred and the legitimate business interests of the Buyer):

(a) Non-compete: for a period of two (2) years from the Completion Date, the Seller shall not, whether as principal, agent, partner, shareholder (otherwise than as a holder of not more than 3% of listed shares), director, employee or consultant, directly or indirectly carry on, be engaged in or concerned with any business which competes with the Business within a radius of 30 miles of the Business premises;

(b) Non-solicitation: for a period of two (2) years from the Completion Date, the Seller shall not solicit, canvass, entice or induce (or attempt to do so) (i) any customer of the Business as at Completion to cease or reduce doing business with the Buyer; (ii) any supplier of the Business to cease or reduce dealing with the Buyer; or (iii) any employee of the Business who transferred to the Buyer to leave their employment;

(c) Non-dealing: for a period of two (2) years from the Completion Date, the Seller shall not (whether or not solicited) deal with, contract with, accept business from or supply any customer of the Business as at Completion in respect of goods or services which compete with those supplied by the Business.

Each covenant is a separate and severable undertaking. The Seller acknowledges that the covenants are reasonable and necessary for the protection of the legitimate business interests of the Buyer in the Goodwill purchased, and are enforceable as restraints purchased for valuable consideration (Nordenfelt v Maxim Nordenfelt [1894] AC 535 and subsequent authorities). If any covenant is held to be unenforceable by reason of its duration or geographical scope, it shall take effect with such modification as is necessary to make it enforceable while giving effect to the parties' commercial intent.

For a period of three (3) months following the Completion Date, the Seller shall, free of charge (save for reasonable out-of-pocket expenses pre-approved by the Buyer in writing), provide the Buyer with such assistance as the Buyer may reasonably require to effect an orderly transition, including introductions to key customers and suppliers, training of the Buyer's staff, transfer of operational know-how and systems passwords, and answering queries on historic matters.

Completion of this Agreement is conditional upon the following condition being satisfied (or waived by the Buyer in its absolute discretion) on or before the Completion Date: the assignment or grant of the lease of the Business premises being consented to in writing by the landlord (such consent not to be unreasonably withheld, having regard to section 1 of the Landlord and Tenant Act 1988).

Each party shall use all reasonable endeavours to satisfy the condition as soon as reasonably practicable. If the condition is not satisfied (or waived) by the Completion Date (or such later long-stop date as the parties may agree in writing), either party may terminate this Agreement by written notice without liability (save for any prior breach), and any deposit paid shall be returned to the Buyer within five (5) Business Days.

Each party shall keep confidential, and shall procure that its directors, officers, employees, advisers and agents keep confidential, all information of a confidential nature obtained in connection with this Agreement or the Business (including the existence and terms of this Agreement), and shall not use or disclose such information except: (a) as required by law, regulation or any competent regulatory authority (including HMRC or the CMA); (b) to professional advisers under a duty of confidence; (c) to the extent the information is or becomes public other than by breach of this clause; or (d) with the prior written consent of the other party.

This obligation shall survive Completion or termination of this Agreement for a period of five (5) years. The Seller shall additionally treat all post-Completion confidential information of the Business as confidential information of the Buyer.

Each party shall comply with its obligations under the UK General Data Protection Regulation and the Data Protection Act 2018 in respect of any personal data (including customer, employee and supplier data) transferred in connection with the sale of the Business.

The Seller shall, before Completion, inform affected data subjects (or procure that they are informed) of the transfer of their personal data to the Buyer and the legal basis for such transfer under Article 6 UK GDPR (typically legitimate interests under Article 6(1)(f), or where required consent under Article 6(1)(a)). The parties shall cooperate in responding to any data subject rights requests (access, erasure, rectification, portability) which concern both pre- and post-Completion activities, and the Seller shall provide the Buyer with copies of all relevant data subject communications for the prior 24 months.

The parties warrant and acknowledge that this Agreement is entered into in good faith, at arm's length, for proper business purposes and for full consideration. The Purchase Price represents the open-market value of the Business. The parties confirm that this Agreement is not intended as, and does not constitute, a transaction at an undervalue (s.238 Insolvency Act 1986), a preference (s.239 Insolvency Act 1986) or a transaction defrauding creditors (s.423 Insolvency Act 1986).

Companies Act s.190: Where the transaction is, or may be, a substantial property transaction with a director or connected person within the meaning of section 190 Companies Act 2006 (being non-cash assets exceeding the lower of £100,000 or 10% of the company's net asset value, subject to a £5,000 floor), the parties confirm that the transaction has been approved by ordinary resolution of the relevant company's members (or is not required to be so approved).

Governing law: This Agreement and any dispute or claim arising out of or in connection with it (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales. The parties irrevocably submit to the exclusive jurisdiction of the courts of England and Wales.

Entire agreement: This Agreement, together with the Disclosure Letter (if any) and the schedules, constitutes the entire agreement between the parties and supersedes all prior drafts, negotiations, representations and understandings. Each party acknowledges that, in entering into this Agreement, it has not relied on any statement, representation or warranty other than those expressly set out herein (save in the case of fraud — section 2(1) Misrepresentation Act 1967 is not excluded).

Variation: No variation shall be effective unless in writing and signed by both parties.

Assignment: Neither party may assign or transfer any of its rights or obligations without the prior written consent of the other, save that the Buyer may assign to any member of its group on giving written notice to the Seller.

Further assurance: Each party shall (at its own cost) execute all such further documents and do all such further acts as the other party may reasonably require to give full effect to this Agreement.

Notices: Any notice shall be in writing and delivered by hand, by recorded delivery post or by email to the address last notified by the recipient. A notice shall be deemed received: if delivered by hand, at the time of delivery; if posted, on the second Business Day after posting; if emailed, at the time of transmission (provided no bounce-back is received).

Third-party rights: A person who is not a party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term, save as expressly provided.

Counterparts: This Agreement may be executed in any number of counterparts (including by electronic signature), each of which when executed shall constitute an original and together shall constitute one agreement.

Severability: If any provision is held invalid or unenforceable, the remainder shall continue in full force, and the parties shall negotiate in good faith to substitute a valid provision giving effect to the parties' commercial intent.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.